Even before COVID-19, the unemployment rate touched a peak in 2017-18 at 6.1%. The urban unemployment rate was 7.8% and the rural unemployment rate was 5.3%. While the unemployment rate declined to 5.8% in 2018-19 and 4.8% in 2019-20, urban unemployment declined marginally to 7.7% and 6.9%, respectively. It was stubbornly around 7-8% during 2021 and later. If we consider the current weekly status quarterly unemployment statistics for urban areas, it was 9.4% in January-March 2021 and rose to 12.6% in April-June 2021. As per the Centre For Monitoring Indian Economy, the average urban unemployment rate remained higher at 9.04% in 2021 and above 7% in January-February 2022. Meanwhile, the rural unemployment rate rose to 8.35% in February 2022 after mild fluctuations around 5-7% since June 2021 (8.75%). Seen by any measure of unemployment or the statistical sources, urban unemployment is of grave concern, at least since the pandemic.
Does a satisfactory system of unemployment relief exist? Unlike in China, the labour laws do not expressly provide for unemployment benefits. However, under the Employees’ State Insurance Act (ESIA), 1948, the Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) provides unemployment allowance to involuntarily unemployed insured persons who have made contributions for two years to ESI. The cash relief is at the rate of 50% of the last average daily wages for the first 12 months and 25% for the next 12 months. It covers unemployment due to retrenchment, closure or permanent invalidity. It provides medical care during unemployment tenure and vocational training.
In 2018, the government introduced the Atal Beemit Vyakti Kalyan Yojana (ABVKY) under which unemployed insured persons are provided allowance at the rate of 50% of the average per day earning of the claimant for 90 days on a pilot basis for two years. This was extended during the COVID-19 period.
